Software Stocks Oversold Expert Investor Sounds the Alarm

• Software stocks are currently oversold due to a lack of profitability among many publicly traded companies.
• Domain expertise is becoming increasingly valuable in the face of AI advancements posing a technical threat to software firms.
• Thoma Bravo is actively seeking undervalued companies with significant domain expertise, seeing them as "jewels" in the market.
• AI is innovating code faster but can't replace the broader functions of R & D teams, preserving the importance of human expertise.

Profitless Software A Recipe for Disaster

Alright, people, listen up. This ain't the Nostromo, but the situation's just as critical. Orlando Bravo from Thoma Bravo is saying what I've been suspecting all along these software companies are running on fumes. He's right most of these so-called tech giants are trading on revenue, not actual profit. That's like facing a Xenomorph with a spork it's just not gonna cut it. As someone who's seen a few close calls, I know that relying on potential instead of results is a dangerous game. Remember, "In space, no one can hear you scream," and in the market, no one will hear you complain when your stock plummets.

AI The New Xenomorph of Software

This AI thing is like another Xenomorph adapting and evolving faster than we can keep up. Bravo is pointing out that domain expertise is what's going to save us. All that accumulated knowledge those years of experience that's what gives a company real value. It's like knowing the exact layout of the vents on the Nostromo that knowledge is the difference between living and becoming lunch. Speaking of companies facing perils, consider Hanwha Aerospace: Profit Plunge Triggers Share Drop, a situation where market forces and internal challenges converge, much like our encounters with the Xenomorph. And these companies with that kind of deep understanding are cheap right now. So pay attention people, it might be the last smart move you make.

Thoma Bravo Hunting for Bargains

Bravo and his team are out there actively looking for these undervalued companies. He calls them jewels. Me I call them survivors. They've got the grit, the experience, and the understanding to navigate the market. And Thoma Bravo is willing to bet big on them. Acquisitions like Dayforce and Jeppesen ForeFlight show they're not just talking, they're putting their money where their mouth is. This is exactly what needs to be done look for the strong ones, the ones who've been through the fire and are still standing.

AI Can't Replace Human Ingenuity

Now, about this AI business, Bravo's got a point. AI can write code faster, sure, but it can't replace the entire R & D team. It can't replace the human element of innovation and problem-solving. "I say we take off and nuke the entire site from orbit. It's the only way to be sure." But seriously AI can't replace that intuition, that gut feeling that tells you something is wrong or something is right. So while AI is a threat it's not an unbeatable one.

R&D Still Matters

Bravo says only about 15% of R&D spending is actually writing code, the other 85% is crucial. That means that even with AI doing some of the work, we still need human expertise to deliver solutions. Companies need to be investing in their people and processes not just hoping AI will solve everything. That's like facing the Xenomorph with a motion tracker alone, you need the flamethrower too.

Stay Vigilant, Stay Alive

So, the message here is clear the software market is oversold, domain expertise is critical, and AI can't replace human ingenuity. Thoma Bravo is making smart moves, but everyone needs to pay attention and make their own decisions. Just remember, "This is Ripley, last survivor of the Nostromo, signing off." Keep your eyes open, trust your instincts, and don't let the Xenomorph or the market get the best of you.